Expert: Gov’t Data Reveal Guest-Worker Firms ‘Abusing’ System to Displace U.S Workers

Southern California Edison
Southern California Public Radio KPCC 89.3

The top two importers of foreign H-1B guest workers are gaming and abusing the guest-worker system to bring in temporary, disposable, and cheaper labor and may be violating the spirit of U.S. immigration and labor laws, according to government data obtained by a prominent Howard University public policy professor.

Ron Hira, one of the nation’s foremost experts on H-1B visas and guest workers, noted in his Thursday Economic Policy Institute report that Tata and Infosys, the “two India-based outsourcing companies,” are “major publicly traded companies with a combined market value of about $115 billion, and are the top two H-1B employers in the United States.” He obtained data through the Freedom of Information Act and found that in fiscal year 2013, “Infosys ranked first with 6,269 H-1B petitions approved by the government, and Tata ranked second with 6,193.”

Hira found that “the average wage for an H-1B employee at Infosys in FY13 was $70,882 and for Tata it was $65,565,” compared “to the average wage of a Computer Systems Analyst in Rosemead, CA (where SCE is located), which is $91,990 (according to the U.S. Department of Labor).” The savings at Southern California Edison, which has come under fire for replacing at least 400 workers with young and cheaper foreign H-1B workers, though, is much greater:

SCE recently commissioned a consulting firm, Aon-Hewitt, to conduct a compensation study, which showed that SCE’s IT specialists were earning an average annual base pay of $110,446. That means Tata and Infosys are getting a 36 to 41 percent savings on labor costs—or saving about $40,000 to $45,000 per worker per year.

H-1B employees generally are not even put on a path toward permanent residency, according to the data. Hira found that “Infosys only sponsored seven H-1B workers for permanent residence, and Tata sponsored ZERO H-1B workers, while the U.S. government approved 12,432 H-1B visa petitions for these two companies alone” in fiscal year 2013.”

“In other words, the H-1B workers Infosys and Tata hire are being used as temporary, cheaper, disposable labor, not as a way to permanently introduce talent and innovation into the American labor market,” Hira concludes.

Hira also found further evidence that the notion that H-1B guest workers are better qualified than Americans is specious. In fact, “the vast majority” of the H-1B workers Infosys and Tata import “hold no more than a Bachelor’s degree”:

If American workers are training their foreign replacements before they get laid off, then it is quite obvious that it’s the American trainers—not the H-1B trainees—who have the superior skills. Are H-1B workers being brought in because they have extensive formal training, like an advanced degree? The answer to that is a definitive no. The vast majority of Infosys and Tata’s imported H-1B workers hold no more than a Bachelor’s degree.

During the FY10-12 period, 78 percent of Tata’s and 85 percent of Infosys’s H-1B employees held only a Bachelor’s degree or less. Finally, there’s also no evidence that Tata and Infosys are using the H-1B to retain foreign students who studied and earned an advanced degree in the United States: Only 1-in-206 of Infosys’ H-1B workers held an advanced degree from a U.S. university, and even less of Tata’s H-1B workers did, just 1-in-222.

As Breitbart News has thoroughly documented, “despite evidence to the contrary, the tech industry has spent millions trying to get massive increases in the number of H-1b guest-worker visas, claiming that they ‘can’t find’ Americans to do various tech jobs” even though there is a proven surplus of America high-tech workers.

A Center for Immigration Studies (CIS) report, “using data from the American Community Survey (ACS) that the Census Bureau and the Bureau’s Current Population Survey (CPS) collect,” found that there is hardly a shortage of American tech workers. In fact, “there were 5.3 million immigrant and native-born STEM workers in 2012 compared to 12.1 million STEM degree holders among immigrants and native-born Americans.” In addition, “only a third of native-born Americans with a STEM degree actually has a job in a STEM occupation while at least 5 million native-born Americans with STEM undergraduate degrees are working in non-STEM occupations.”

The report also found that from 2007-2012, STEM employment averaged “averaged only 105,000 jobs annually.” And during that time, the number of U.S.-born STEM graduates grew by an average of 115,000 a year, and the “U.S. admitted about 129,000 immigrants with STEM degrees,” which means “the number of new immigrants with STEM degrees admitted each year [was] by itself higher than the total growth in STEM employment.” Numerous studies from left-of-center, nonpartisan, and right-of-center organizations have all concluded that the data do not support claims of a high-tech labor shortage.

Though Southern California Edison has claimed that H-1B workers “will lead to enhancements that deliver faster and more efficient tools and applications for services that customers rely on” and that “through outsourcing, SCE’s information technology organization will adopt a proven business strategy commonly and successfully used by top U.S. companies that SCE benchmarks against,” the employees ComputerWorld interviewed have said the H1-B workers “do not have the skill levels of the people they are replacing.”

“They are bringing in people with a couple of years’ experience to replace us and then we have to train them,” a longtime IT worker told ComputerWorld. “It’s demoralizing and in a way I kind of felt betrayed by the company.” The Southern California Edison employees were “beyond furious” because “not one of these jobs being filled by India was a job that an Edison employee wasn’t already performing.” And, that, according to Hira could violate U.S. immigration and labor laws.


As ComputerWorld noted:

Hira pointed out that as a part of the application process to obtain H-1B approval from the Labor Department, an employer is required to attest to the following: “Working Conditions: The employer attests that H-1B, H-1B1 or E-3 foreign workers in the named occupation will not adversely affect the working conditions of workers similarly employed.” This statement is in Form 9035CP of the LCA.Further, Hira noted that the Labor Department states, “The Immigration and Nationality Act (INA) requires that the hiring of a foreign worker will not adversely affect the wages and working conditions of U.S. workers comparably employed.

“The SCE case is clearly one where the hiring of the H-1B is adversely affecting the wages and working conditions of American workers,” Hira told ComputerWorld. “There isn’t a clearer cut case of adverse impacts – the American worker is losing his job to an H-1B.”

In an open letter to Secretary of Labor Tom Perez and Wage and Hour Administrator David Weil this week about Southern California Edison’s layoffs, Ross Eisenbrey, the Vice President of the Economic Policy Institute, called for Perez to conduct a thorough investigation of Southern California Edison’s H-1B practices.

“I hope that we will soon learn that the Department of Labor intends to investigate and remedy this harm to skilled U.S. workers who have pursued education and training in a technical field, worked hard, and played by the rules,” he added. “Our government should, at the very least, ensure that its programs, including its visa programs, are not used to destroy the careers and financial security of its people.”

Eisenbrey reminded Perez that “the law (the Immigration and Nationality Act) forbids the hiring of H-1B temporary foreign guestworkers whose employment would ‘adversely affect the wages and working conditions of U.S. workers comparably employed.'”

“Clearly, taking away the jobs, wages and benefits of the laid-off SCE employees does adversely affect their wages and working conditions,” Eisenbrey said. “You have authority under the Immigration and Nationality Act to investigate this case, but I have seen no announcement that you intend to do so or that you share my sense of outrage that the H-1B program is being abused in such an egregious way.”

He mentioned that, as his colleague Hira has written, “adding to the injustice, American workers losing their jobs are being forced to do ‘knowledge transfers,’ an ugly euphemism that means being forced to train your own foreign replacement.”

In addition, Hira noted that “Infosys and Tata have a history of getting in trouble for paying even lower wages than they are already legally allowed to pay. In 2013 Tata paid $30 million to settle a wage theft dispute involving 13,000 foreign workers, and Infosys paid a record $34 million to settle a visa fraud case after it committed “systemic visa fraud and abuse of immigration processes.” He concluded that, “as a general principle, companies that behave like this should not be allowed to benefit from the U.S. temporary foreign worker programs, much less be the top two beneficiaries of them.”

“If the investigation finds willful violations of the H-1B program, Tata and Infosys should be debarred from using the program,” Hira wrote.

Hira, as Breitbart News has reported, previously emphasized that the IT sector has traditionally been an “area of social mobility” where “people who come from working-class backgrounds” move up the economic ladder after going “into these sectors.” Proving Hira’s point, one Southern California Edison employee who was laid off may have trouble keeping his home.

Last year, Vice President Joe Biden emphasized the importance of good-paying tech jobs in helping Americans move up the economic ladder, especially for women from, in Biden’s words, “from the ‘hood.”

“These were people with high school degrees coming out of the most hard-scrabbled neighborhoods, every one of them in Detroit,” Biden said. “Every one had a job. The lowest starting salary $58,000. The highest, [$81.000], because in Detroit, there is an immediate need now for 1,000 programmers… Every one of those women has a job… average job $65,000 a year.”

Even President Barack Obama, who “could not claim legal authority to award the tech industry more H-1B visas,” has said he becomes “skeptical” when companies claim they need more guest workers.

“I’m generally skeptical when you hear employers say, ‘oh we just can’t find any Americans to do the job,’” Obama said at an immigration event in Nashville shortly after enacting his executive amnesty. “A lot of times what they really mean is that it’s a lot cheaper to potentially hire somebody who has just come here before they know better…”

But massive increases in H-1B workers is the crown jewel for the tech industry in any immigration bill. Groups like Facebook co-founder Mark Zuckerberg’s have spent millions trying to get increases in guest-worker visas while tech titans like Bill Gates have pushed for more guest workers even while Microsoft announced it was laying off 18,000 American workers.

Top GOP leaders in the Senate and House, though, have indicated they want to move forward with legislation that will massively increase H-1b visas in this Congress. As Breitbart News noted, lawmakers are hoping to use a bipartisan guest-worker bill that benefits the tech industry as a “gateway” to a broader and more comprehensive immigration bill.


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